In June 2017, a coalition of craft brewers in Sydney’s inner west banded together to lobby for a change to taxation arrangements. At the time, independent brand Willie the Boatman told SmartCompany its tax bill was around $20,000 a month because it brewed beer in kegs smaller than 48 litres.

At present, kegs of 48 litres or less with an alcohol volume of up to three percent attract an excise tax of $42.50 per litre of alcohol.

On Friday, Treasurer Scott Morrison agreed to change the rules, announcing that the budget papers will include a policy to tax all beer kegs the same way if they hold eight litres or more. This would mean brewers paid around $8.50 per litre for all containers that hold more than eight litres. The same policy will also apply to distillers if they use containers of the same size.

In a statement, Morrison said the policy would assist 380 craft brewers and 100 domestic distillers across Australia. The exact dollar cost of the changes to the budget bottom line is expected to be outlined in tomorrow night’s budget papers.

As part of our commitment to unleash the potential of Australian small businesses, the Turnbull Gov will increase the amount brewers & distillers can claim back on their excise and extend the concessional draught beer excise rate to smaller kegs used by craft brewers. #auspolpic.twitter.com/CYueKE59iO

In a press conference on Friday, Morrison said the craft brewing scene is a “dynamic, new industry that has been growing up in Australia” and small businesses in the sector deserve a more level playing field.

However, Labor was quick to point out that it had long been calling for a change in this area, with shadow infrastructure minister Anthony Albanese heavily involved in the campaign to change the tax rules.

SmartCompany is the leading online publication in Australia for free news, information and resources catering to Australia's entrepreneurs, small and medium business owners and business managers.

Monday to Friday, SmartCompany.com.au publishes news, business trends and ideas from around the world, profiles and features, as well as all the latest business, tax, legal, marketing, politics and innovation developments occurring around the country.